"The Latin American drug cartels have stretched
their tentacles much deeper into our lives than most
people believe. It's possible they are calling the
shots at all levels of government."

- William Colby, former CIA Director, 1995

The Solari Index is my way of estimating how well a place is
doing. It is based upon the percentage of people in a place who
believe that a child can leave his or her home, go to the
nearest place to buy a popsicle and come home alone safely.

When I was a child growing up in the 1950s at 48th and Larchwood
in West Philadelphia, the Solari Index was 100 percent. It was
unthinkable that a child was not safe running up to the stores
on Spruce Street for a popsicle and some pinball. The Dow Jones
was about 500 and the Solari Index was 100 percent.

Today, the Dow Jones is over 9,000 and my favorite hairdresser
in Philadelphia, Al at the Hair Hut in West Philadelphia, and I
just agreed that the Solari Index is in the tank -- both in
the streets of Philadelphia and throughout America.

Life on the street isn’t sweet any more. I watched the
slide of the Solari Index as a child. A lot of it had to do with
narcotics trafficking and the people that
narco dollars put in
power on our streets -- and in City Hall, in the banks, in
Congress and the corporations and investors that surround the
city.

Once a month I drive to Philadelphia from my home in Hickory
Valley, Tenn., to attend a board meeting. I stay in a lovely
little apartment in the first floor of a rowhouse owned by my
friend Georgie, not far from where I grew up in West
Philadelphia.

Georgie is one of my favorite people in the world. One day,
Forest, my dog, and I were up in Georgie’s apartment to
enjoy a fresh plate of scrapple that Georgie had fried up that
morning. The conversation turned to
narco dollars. Georgie said
that looking at the big picture was simply too overwhelming.
Couldn’t I explain this in terms of a neighborhood in
Philadelphia? So we got out a blank piece of paper and started
to estimate.

We assumed that two or three teenagers on a Philadelphia street
corner dealing drugs could theoretically do $300 a day of sales
each and work 250 days a year. We guessed that their supplier
got 50 percent, and maybe ran his net profits of $100,000
through a local fast-food restaurant that was owned by a
publicly traded company. Assuming that company had a stock
market value of 20-30 times its profits, a handful of teenagers
could generate approximately $2 million to $3 million in stock
market value for a major corporation, not to mention a nice flow
of deposits and business for the Philadelphia banks and
insurance companies.

OK, that is what a handful of kids can do. Let’s look at
all the organized crime profits, narcotics trafficking and
everything else. If the Department of Justice is correct about
$500 billion to $1 trillion of annual money laundering in the
U.S., then about $20 billion to $40 billion is a reasonable
estimate for what should move annually through the Philadelphia
Federal Reserve district.

Assuming a 20-percent margin for organized-crime profits and a
20-times multiple on the stock of the companies being used to
launder the money, the stock market value that could potentially
be "addicted" to organized crime profits flowing through the
Philadelphia area from $20 billion to $40 billion in narco- and
organized-crime revenues could be as much as $160 billion. If
you add all the things you could do with debt and other ways to
increase the multiples, you could get that even higher, say $250
billion.

Imagine what would happen if all these teenagers in the
Philadelphia area stopped taking and dealing drugs? Now do you
understand what Philadelphia mothers and dads are up against
when they try and make sure their children are safe?

Last summer, I made a presentation called
"How the Money Works on Organized Crime" to a wonderful group of about 100 people at
an annual conference for a spiritually focused foundation in
Philadelphia. This is a group committed to contributing to the
spiritual evolution of our culture.

After about an hour walking through the various profits generated
by narcotics trafficking, financial fraud and other types of
organized crime, as well as the intersection of this money with
the stock market and campaign fundraising, I asked the group
what would happen to the stock market if we decriminalized or
legalized drugs?

The stock market would crash, they said.

What would happen to financing the government deficit if we
enforced all money-laundering laws? Since most bank wire
transfers are batched and run through the New York Federal
Reserve Bank, this should not really be that hard, right?

I then asked them to imagine a big, red button at the front of
the lectern.

By the power of our imaginations, if they pushed that button
they could decriminalize narcotics trafficking or whatever
actions were necessary to stop organized crime and stop all
money laundering in the United States.

Who would push the button?

It turns out that in an audience of approximately 100 people
committed to spiritually evolve our society, only one person
would push the button.

Upon reflection, 99 would not. I asked why. They said that if
they pushed the button, their mutual funds would go down and
their government checks might stop. I commented that what they
were proposing is that an entire infrastructure of people
continue to market narcotics to their children and grandchildren
to ensure that their mutual and pension funds stay high in
value.

They said, yes, that was right.

Which is why I say that America is not addicted to narcotics as
much as it is addicted to narco dollars.

Can we face our addiction to narco
dollars? Can we do it in a
way that entrepreneurs like me can build successful businesses
and transactions that profit from getting the Solari Index and
the Dow Jones Index to go up together while getting debt to go
down?

It’s quite possible. Helping the Solari Index rise back to
100 percent is the biggest capital gains opportunity in the
Philadelphia area, on real estate as well as what is possible
from re-engineering government investment and pooling
small-business equity in a manner that provides competitive
access to the stock market. Generations of accumulated
narco dollars could do
very well investing successfully in such a
capital gains opportunity.

The creation of a solari, a local knowledge manager/databank
that publishes neighborhood financial statements and information
and tracks the Solari Index in your place, can make it possible
for your neighborhood to create pools of private equity that
could channel capital to the profitable opportunities in your
area. That is a lot of capital that local entrepreneurs can use
to create jobs and to build their businesses -- even start
new ones.

It’s time to face our addiction to
narco dollars and to
grapple with how to reverse our incentive systems. It is time to
figure out how publicly traded companies and our banks and
insurance companies can make more money from our kids succeeding
than from them failing. Indeed, it can be done.

So here is my message on our addiction to
narco dollars. Now
that we have run the Solari Index down to near zero percent and
increased our dependency on debt while fueling the rise of the
Dow Jones about 20 times since I was a kid, the new opportunity
is going to be the fortunes to be made on businesses and
investment vehicles that fuel the Solari Index rising.

Wouldn’t you pay for streets to be sweet for your child
once again? Especially if it made you a whole bunch of money on
an initial public offering of your neighborhood mutual or
venture fund in the stock market?

My money is on Solari rising.

Catherine Austin Fitts is a former managing director of Dillon
Read & Co Inc., a former assistant secretary of housing in
the first Bush administration, and the former president of
The
Hamilton Securities Group Inc. She is the president of
Solari Inc., an
investment advisory firm. If you would like to respond
to this Slant or have one of your own (850 words), contact
Howard Altman, City Paper interim editor, 123 Chestnut St.,
Phila., PA 19106 or e-mail altman@citypaper.net.

From "The Rise of the Rule of Law," September 2002:
http://courtskinner.com/solari/Rise.htm
The ability of the net energy plus people in the US to
understand what is happening and how and why has been
surprisingly poor. This general ignorance has been helped along
by corporate control of the media (which, for this reason, I
call the `corporate media,' to distinguish it from the
independent media), `info-warfare' and covert operations. The
more public form of information warfare promotes
divide-and-conquer tactics and incentives (men vs. women, rich
vs. poor, black vs. white, Christian vs. non-Christian,
Republican vs. Democrat and so forth). The more private form of
covert operations includes targeting by tax and regulatory
authorities, blackmail, financial and sexual bribery that
support `control file' systems, assassination and the use
various other forms of covert operations that diminish a more
general communication about what is happening and why.
A
review of the economics helps us understand why and how. If we
can presume that 10% of revenues is a reasonable advertising and
marketing budget for a high-margin industry, then organized
crime in America as measured by the Department of Justice's
estimate of $500 billion to $1 trillion in annual money
laundering through the US financial system has about $50 billion
to spend annually on `marketing' in ways more subtle than
explicit Madison Avenue T.V. and magazine ads. Add that amount
to the government budgets that can be used to police franchises,
and the amount of money spent on controlling and influencing the
`official reality' is stupefying. When an understanding of the
amount spent to mislead is combined with an understanding of our
intentional failure of disclosure regarding government
investment and performance, particularly place-based disclosure,
the intentional and increasing centralization of economic and
political power by unlawful means can be much better
understood.
The
advantage of such a system to current US leadership is
clear. By centralizing the holding of equity in local
institutions or in outside institutions that affect local
matters (whether through McDonalds franchises or national
telecommunications companies) and denying equity to those who do
not support the centralization process, the few at the top can
amass the political base of operations and resources they and
their global investors need to dominate global political and
economic power. It is fair to say that that if we could
eliminate narcotics trafficking and the so-called `War on
Drugs', the US political and business leadership would be more
likely to resemble a representative sampling of the US
population than a G-7 gathering of global financial elites.
As
new technology promotes meaner and far more subtle and
invisible forms of economic warfare and social control, the
centralization of political and economic power in the US
continues with the latest transformation from the War on Drugs
to the War on Terrorism. The latter moves the targeting of
continuous `clamp down' supported by sophisticated relational
database technology and digital surveillance to whiter,
wealthier and better-educated populations at the same time that
this population's economic and political power and resources are
diminishing.
The
Solari challenge is to create a transformation out of the
current win-lose situation in which we find ourselves. The key
is to provide a trustworthy flow of information locally that --
when combined with equity incentive systems -- promotes and
incentivizes high standards of responsibility and accountability
going forward. Only a system that creates significantly greater
amounts of wealth can do so. The fundamental principle that all
humans want more energy -- not less- along with the mysteries of
freedom and intelligence tell us that it is possible.
Making
it possible starts with increasing the flow of energy to
the net energy plus people and moving them back into leadership
positions locally. This can happen in a model in which a portion
of the resulting capital gains flows to the capital that was
amassed through organized crime and government corruption. In
exchange for offering the leadership of organized crime a
`double' on their ill-gotten gains, the local `net energy plus'
people can buy back control of their local areas. This alignment
is necessary to achieve breakthroughs in reengineering
place-based government investment. Without it, the risks to both
sides are significant.
This
is why the Solari Stock Plan is at the very core of the
solari model. The economic productivity that can be unleashed
when the high performance people are in control subject to
traditional conditions of fiduciary accountability and
performance are so extraordinary that `buying' our way into such
a system turns out to be surprisingly economic for all
concerned.